The very term "market failure" is a big win for interventionists. I have long disliked the term intensely. Why not replace it with "collective action failure" or anything that doesn't focus solely on markets?
True, it's not just about markets... unless you take David's view that almost any system in which individual actors with different interests make choices can be viewed as a market. If you do take that very inclusive view, I think "market failure" is a perfectly good name for a situation in which individually optimizing choices add up to a globally sub-optimal outcome. Particularly since one of the remarkable things about markets is how often individually optimizing choices *do* add up to a pretty-close-to-optimal global outcome.
The name "collective action failure" strikes me as misleading, in that it suggests the problem is with an action taken collectively; in fact, in these scenarios, a single action taken collectively could have turned out better than a bunch of actions taken individually.
I wondered about David's discussion on that point. Palin was not on any primary ballot, to my recollection, and was a complete surprise when McCain her as a running mate
Palin's biggest problem wasn't Democrat attacks, it was that her "handlers" set her up for failure for reason of their own.
I tend to think that people vote primarily as an act of expression rather than as an attempt to push the probabilities of who gets elected. E.g. millions of people recently voted against Vladimir Putin despite knowing that doing so would surely have no effect on the election results. Thus I don't think it makes sense to label voting as irrational simply because it has an impact of pushing the probability of some political outcome ever so slightly in an unwanted direction.
I agree. It is irrational to vote as a way of changing outcomes in a large polity, but not irrational to vote as a consumption activity, like cheering at a football game, which also is unlikely to change the outcome.
I think it would be a mistake to model Trump as having no ideological commitments. He has no *policy* commitments, and his ideological commitments are unusual, not non-existent. He supports what he views as best in terms of outcomes for his constituents - The American People, or less generously the 25-30% of the country that seem to support him no matter what happens.
You could perhaps rephrase it even less generously and say that he supports those that are loyal to himself, which is a type of ideological commitment. I think he styles himself as a true champion of the people (at least a strong majority) and wants that to be true, but when pushed will support those that are most loyal as a fallback position.
Saying that he has no ideology makes his movements seem capricious and erratic, which is true in terms of *policy* but not ideology. He supports coal miners and factory workers (among other groups), whether that would entail enacting tariffs, suppressing immigration, subsidizing their lifestyles, or potentially a bunch of other conflicting policies.
He may be wrong about whether those things will benefit the people he intends to benefit, but I think the ideology is consistent and reliable. *Why* he has that ideology, and whether he is altruistic about it (highly doubtful) is a different conversation. If it's a pure patronage system where he benefits those that benefit him, that's still a type of ideology. I would argue that both major parties have been doing similar things for a very long time, just with better presentation and more plausible deniability.
I would not describe a policy of "do whatever gives you power and status" as an ideology, although it might lead to predictable behavior. The same tariffs that benefit auto workers hurt farmers, and although Trump may not know that I can see no evidence that he cares, that he is trying to do what benefits his supporters as opposed to what will get him their support.
I don't think that was true of the patronage systems of the old city machines, at least as judged by Plunkitt's account of Tammany, which I discussed in an earlier post. They really were trying to take care of their people at a very basic level — because that was the best way of getting loyal voters.
"Market failure, a technical term in economics, does not mean any situation where a market fails. It describes situations where individual rationality fails to produce group rationality, where each individual takes the action that he correctly believes is in his interest and most, in the limiting case all, are worse off as a result."
Both “market failure” and “rationality” naturally invite confusion. Very tentative alternatives:
where <individual optimisation> causes <collective suboptimisation> that is <invisible-hand failure>.
However, that <invisible-hand failure> might well not be spontaneous (or anarchic) but ultimately be caused by state-imposed perverse incentives.
Another problem with assessing a candidate's electability is we have a hard time separating that from how much we like them. People frequently argue that their preferred primary candidate WILL win and is the truly popular choice even when this is obviously false from an outside view.
People voting for the candidate they most agree with in the primaries are probably not being strategic about having a lower chance of winning the general trading off against their potential policy benefits, but genuinely biased.
"If instead they vote in the primary for the candidate whose views are closest to theirs, the obvious explanation for the failure of the median voter theorem to predict which candidate gets nominated, they are making a mistake, being irrational."
I think a large part of the problem is the existence of hard red and hard blue districts, where success is effectively guaranteed by one party. As a result, general elections cease to be relevant for any position that isn't statewide or nationwide (e.g. seats in the City Council, State Legislature, and House of Representatives).
Thus, the primary election for the dominant party becomes the only election that actually matters. As a result, aspiring politicians no longer need to appeal to the moderate majority. Instead, their success is dependent on how much they can appeal to the most extreme partisans, since those are generally the people who are most likely to vote in primaries. This incentivizes politicians to take increasingly extreme positions. In Democrat-controlled cities, this usually means appealing to the social and economic hyper-progressivism of radical leftists, rather than center-left neoliberals. In Republican-dominated rural areas, this usually means appealing to nationalists, traditionalists, the Religious Right, and other social conservatives, rather than moderates or fiscal conservatives. In both environments, it means using populist appeals and vehement opposition to "the establishment" (which in this case effectively just means The Other Side + moderates on your own side).
Once the city, state, and federal governments are filled with extremists who hate the establishment, that's going to have a serious effect on the public perceptions and ideological composition of the Republican and Democratic parties as a whole. It's going to be harder for moderate candidates to make it through primaries, even for Senatorial and Presidential elections where the general election does matter and appointing a moderate would make winning far more likely. If you view the establishment as not merely misguided on policy but actively malicious and evil, and view the moderates in your party as traitors who are secretly in bed with The Other Side, then you'll be far less amenable to the idea of voting for moderates in the primary.
You might be interested in an earlier post of mine discussing how political machines used to work. A lot of their power came from effective control of the primaries:
There might be some sort of market failure *not* occurring in non-swing states, although I can't be sure.
The usual logic a voter can take in such a state, if they don't side with the dominant party in that state, is to vote for their real first choice, even if it isn't the other major party. Given that, one might expect a lot of such votes in states such as CA, NY, or TX. But instead, second place goes reliably to the other major party, and it's never even close (AFAIK; I think that if it ever was, I would have heard about it).
Maybe voters are just that loyal to the other major party. Maybe it's lack of marketing or interest. I don't know.
Another consideration is that if a candidate wins in the electoral college without winning the popular vote, people are going to make noises that he's illegitimate, and those noises will benefit the other major party.
To offer a single data point... my mother, who lives in South Carolina, registered as a Republican this year so she could vote for Nikki Haley in the Republican primary -- not because Haley would be easier to beat, but because it would be less bad if she won. (If we had ranked balloting, she could have cast a sincere ballot for Biden > Haley > Trump, without bothering with primaries.)
The alternative strategy, of voting in the opposite party's primary for the most-outrageous, easiest-to-beat candidate, is a higher-stakes gamble: the odds of getting what you really want are better, but if you lose, you (and, in your opinion, everybody around you) lose bigger.
A lot of non-Democrats, myself included, do that in Hawaii as the Democratic primary is all that matters here given there is no Republican presence at any level of government even municipal and hasn't been for decades. I.e. pick the least bad Democrat in the primary because they will win the general and then vote however you want in general as it's irrelevant.
Did Palin consider running for president in 2008? I wasn't aware of that; I didn't follow American politics at that time, and I can't easily find anything about it.
If she did, it went not far beyond that. She got on the national political map by being McCain's running mate in 2008, and after that, she was doing speaking tours, but I don't remember her ever throwing her hat in the ring in 2008 or afterward. (I think she's run for Congress, but other than that, she seems to take a lot of roles in television.)
Reading the Wiki article, it sounds as though she considered running for president in 2011 but eventually decided not to. The blog post that that part of this post was based on was posted in 2011. My discussion in this post confused that campaign with 2008, when she was the VP candidate. I've added a note to the post pointing out the error.
The very term "market failure" is a big win for interventionists. I have long disliked the term intensely. Why not replace it with "collective action failure" or anything that doesn't focus solely on markets?
True, it's not just about markets... unless you take David's view that almost any system in which individual actors with different interests make choices can be viewed as a market. If you do take that very inclusive view, I think "market failure" is a perfectly good name for a situation in which individually optimizing choices add up to a globally sub-optimal outcome. Particularly since one of the remarkable things about markets is how often individually optimizing choices *do* add up to a pretty-close-to-optimal global outcome.
The name "collective action failure" strikes me as misleading, in that it suggests the problem is with an action taken collectively; in fact, in these scenarios, a single action taken collectively could have turned out better than a bunch of actions taken individually.
If every system is a market the term loses its meaning. How about "coordination problem"?
Sarah Palin never ran for the presidential nomination.
Ok, I’m glad it isn’t just me. I was wondering if I was going crazy.
I wondered about David's discussion on that point. Palin was not on any primary ballot, to my recollection, and was a complete surprise when McCain her as a running mate
Palin's biggest problem wasn't Democrat attacks, it was that her "handlers" set her up for failure for reason of their own.
I tend to think that people vote primarily as an act of expression rather than as an attempt to push the probabilities of who gets elected. E.g. millions of people recently voted against Vladimir Putin despite knowing that doing so would surely have no effect on the election results. Thus I don't think it makes sense to label voting as irrational simply because it has an impact of pushing the probability of some political outcome ever so slightly in an unwanted direction.
I agree. It is irrational to vote as a way of changing outcomes in a large polity, but not irrational to vote as a consumption activity, like cheering at a football game, which also is unlikely to change the outcome.
I think it would be a mistake to model Trump as having no ideological commitments. He has no *policy* commitments, and his ideological commitments are unusual, not non-existent. He supports what he views as best in terms of outcomes for his constituents - The American People, or less generously the 25-30% of the country that seem to support him no matter what happens.
You could perhaps rephrase it even less generously and say that he supports those that are loyal to himself, which is a type of ideological commitment. I think he styles himself as a true champion of the people (at least a strong majority) and wants that to be true, but when pushed will support those that are most loyal as a fallback position.
Saying that he has no ideology makes his movements seem capricious and erratic, which is true in terms of *policy* but not ideology. He supports coal miners and factory workers (among other groups), whether that would entail enacting tariffs, suppressing immigration, subsidizing their lifestyles, or potentially a bunch of other conflicting policies.
He may be wrong about whether those things will benefit the people he intends to benefit, but I think the ideology is consistent and reliable. *Why* he has that ideology, and whether he is altruistic about it (highly doubtful) is a different conversation. If it's a pure patronage system where he benefits those that benefit him, that's still a type of ideology. I would argue that both major parties have been doing similar things for a very long time, just with better presentation and more plausible deniability.
I would not describe a policy of "do whatever gives you power and status" as an ideology, although it might lead to predictable behavior. The same tariffs that benefit auto workers hurt farmers, and although Trump may not know that I can see no evidence that he cares, that he is trying to do what benefits his supporters as opposed to what will get him their support.
I don't think that was true of the patronage systems of the old city machines, at least as judged by Plunkitt's account of Tammany, which I discussed in an earlier post. They really were trying to take care of their people at a very basic level — because that was the best way of getting loyal voters.
https://daviddfriedman.substack.com/p/how-politics-worked
"Market failure, a technical term in economics, does not mean any situation where a market fails. It describes situations where individual rationality fails to produce group rationality, where each individual takes the action that he correctly believes is in his interest and most, in the limiting case all, are worse off as a result."
Both “market failure” and “rationality” naturally invite confusion. Very tentative alternatives:
where <individual optimisation> causes <collective suboptimisation> that is <invisible-hand failure>.
However, that <invisible-hand failure> might well not be spontaneous (or anarchic) but ultimately be caused by state-imposed perverse incentives.
https://jclester.substack.com/p/rationality-a-libertarian-viewpoint
Another problem with assessing a candidate's electability is we have a hard time separating that from how much we like them. People frequently argue that their preferred primary candidate WILL win and is the truly popular choice even when this is obviously false from an outside view.
People voting for the candidate they most agree with in the primaries are probably not being strategic about having a lower chance of winning the general trading off against their potential policy benefits, but genuinely biased.
In which case it is not market failure in my sense.
"If instead they vote in the primary for the candidate whose views are closest to theirs, the obvious explanation for the failure of the median voter theorem to predict which candidate gets nominated, they are making a mistake, being irrational."
I think a large part of the problem is the existence of hard red and hard blue districts, where success is effectively guaranteed by one party. As a result, general elections cease to be relevant for any position that isn't statewide or nationwide (e.g. seats in the City Council, State Legislature, and House of Representatives).
Thus, the primary election for the dominant party becomes the only election that actually matters. As a result, aspiring politicians no longer need to appeal to the moderate majority. Instead, their success is dependent on how much they can appeal to the most extreme partisans, since those are generally the people who are most likely to vote in primaries. This incentivizes politicians to take increasingly extreme positions. In Democrat-controlled cities, this usually means appealing to the social and economic hyper-progressivism of radical leftists, rather than center-left neoliberals. In Republican-dominated rural areas, this usually means appealing to nationalists, traditionalists, the Religious Right, and other social conservatives, rather than moderates or fiscal conservatives. In both environments, it means using populist appeals and vehement opposition to "the establishment" (which in this case effectively just means The Other Side + moderates on your own side).
Once the city, state, and federal governments are filled with extremists who hate the establishment, that's going to have a serious effect on the public perceptions and ideological composition of the Republican and Democratic parties as a whole. It's going to be harder for moderate candidates to make it through primaries, even for Senatorial and Presidential elections where the general election does matter and appointing a moderate would make winning far more likely. If you view the establishment as not merely misguided on policy but actively malicious and evil, and view the moderates in your party as traitors who are secretly in bed with The Other Side, then you'll be far less amenable to the idea of voting for moderates in the primary.
You might be interested in an earlier post of mine discussing how political machines used to work. A lot of their power came from effective control of the primaries:
https://daviddfriedman.substack.com/p/how-politics-worked
There might be some sort of market failure *not* occurring in non-swing states, although I can't be sure.
The usual logic a voter can take in such a state, if they don't side with the dominant party in that state, is to vote for their real first choice, even if it isn't the other major party. Given that, one might expect a lot of such votes in states such as CA, NY, or TX. But instead, second place goes reliably to the other major party, and it's never even close (AFAIK; I think that if it ever was, I would have heard about it).
Maybe voters are just that loyal to the other major party. Maybe it's lack of marketing or interest. I don't know.
Another consideration is that if a candidate wins in the electoral college without winning the popular vote, people are going to make noises that he's illegitimate, and those noises will benefit the other major party.
To offer a single data point... my mother, who lives in South Carolina, registered as a Republican this year so she could vote for Nikki Haley in the Republican primary -- not because Haley would be easier to beat, but because it would be less bad if she won. (If we had ranked balloting, she could have cast a sincere ballot for Biden > Haley > Trump, without bothering with primaries.)
The alternative strategy, of voting in the opposite party's primary for the most-outrageous, easiest-to-beat candidate, is a higher-stakes gamble: the odds of getting what you really want are better, but if you lose, you (and, in your opinion, everybody around you) lose bigger.
A lot of non-Democrats, myself included, do that in Hawaii as the Democratic primary is all that matters here given there is no Republican presence at any level of government even municipal and hasn't been for decades. I.e. pick the least bad Democrat in the primary because they will win the general and then vote however you want in general as it's irrelevant.
Did Palin consider running for president in 2008? I wasn't aware of that; I didn't follow American politics at that time, and I can't easily find anything about it.
If she did, it went not far beyond that. She got on the national political map by being McCain's running mate in 2008, and after that, she was doing speaking tours, but I don't remember her ever throwing her hat in the ring in 2008 or afterward. (I think she's run for Congress, but other than that, she seems to take a lot of roles in television.)
Reading the Wiki article, it sounds as though she considered running for president in 2011 but eventually decided not to. The blog post that that part of this post was based on was posted in 2011. My discussion in this post confused that campaign with 2008, when she was the VP candidate. I've added a note to the post pointing out the error.